TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Patricia Matson, Senior Management Analyst
SUBJECT:Title
Consideration of a Resolution Approving an Agreement with the North Manhattan Beach Business & Professional Association for the Management of the North Manhattan Beach Business Improvement District and Appropriate $82,050 from the Parking Fund (Unbudgeted) (City Manager Mirzakhanian).
A) ADOPT RESOLUTION NO. 25-0055
B) APPROPRIATE FUNDS
Body
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RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 25-0055 approving an agreement with the North Manhattan Beach Business & Professional Association (NMBBPA or Association) for the management of the North Manhattan Beach Business Improvement District (NMBBID) and appropriate $82,050 from the Parking Fund.
FISCAL IMPLICATIONS:
Activities conducted by the NMBBID are funded through an 80% surcharge to the business license tax paid by those businesses located within the district, not to exceed $500 annually. These funds are used to support activities that benefit the BID and are managed in the City’s Parking Fund. Payments to the NMBBID have no budgetary impact on the City’s General Fund.
If approved by the City Council, a payment will be made to the NMBBPA in the amount of $74,550, which was the amount approved in the NMBBID’s 2025 Budget and Activity Plan. This plan was previously approved by City Council on February 18, 2025.
An additional not to exceed amount of $7,500 will also be provided to the NMBBPA to cover the cost of insurance premiums (required as part of the attached agreement) for the first year of services. The NMBBID Advisory Board authorized the NMBBPA to request the additional funds for insurance from the City at their May 6, 2025, meeting as they are considered startup costs and were not considered when estimating the needed funds to establish the Association.
To support these expenditures, an appropriation of $82,050 is needed from the Parking Fund, which will be drawn from the NMBBID reserve funds. The NMBBID currently has funds of approximately $360,000 being held in reserve by the City. The reserves remaining after the initial payment mentioned above and closure of outstanding invoices for FY 24-25 will continue to be held by the City until the funds are requested and approved by City Council for release to the Association. If the NMBBPA identifies a need for additional funding that would benefit the BID outside of the approved budget, these requests can be brought to the City Council for consideration at a future City Council meeting during the year or as part of the annual public hearing and approval of the activity plan and budget process.
BACKGROUND:
For many years, City staff has actively managed the activities of the NMBBID by serving as a liaison, drafting and publishing agendas and minutes, executing agreements on behalf of the NMBBID, and managing its expenditures and revenues.
The City’s responsibilities to the NMBBID contrast significantly with those of the City’s other BID, the Downtown Business Improvement District (Downtown BID). The current Downtown BID has been managed by the Downtown Manhattan Beach Business & Professional Association (DMBBPA), a non-profit organization, since 1998. Because of this structure, the City has not needed to provide the same level of support for the Downtown BID. The DMBBPA’s non-profit status and focused mission allows the Downtown BID to operate with greater efficiency, enabling expedited decision making, contract execution and fund management. For these reasons, the NMBBID sought to explore functionality similar to the Downtown BID. As identified in the approved 2023 and 2024 Activity Plans, the NMBBID desired to explore the feasibility of operating under a professional non-profit association similar to the DMBBPA.
On April 2, 2024, the City Council agreed to the conceptual approval to transition ongoing management of the NMBBID to a non-profit as well as execute a future agreement with the entity to provide services to the NMBBID. At the same meeting, City Council authorized and appropriated $10,000 from the Parking Fund to develop the non-profit association.
Since that time, with the assistance of the Chamber of Commerce acting as the Executive Coordinator for the NMBBID, the Advisory Board initiated the process of forming an association.
DISCUSSION:
The North Manhattan Beach Business & Professional Association is now an established 501(c)(6) non-profit association that is ready to proceed with the management of the North Manhattan Beach Business Improvement District activities, initiatives, and budget. An agreement regarding the relationship has been reviewed by both the City and the Association with copies provided to the NMBBID Advisory Board. The agreement is provided as an attachment to this report.
The Association, as an independent contractor, will be responsible for implementing the BID’s programs and activities as described in the Annual Budget and Activity Plan as well as manage the approved budget. They will also be required to provide the City and Advisory Board with quarterly expenditure updates and a complete end of term report.
The City will continue to conduct the activities related to the annual public hearing to levy the assessments and consider the annual budget and activity plan for approval. The City will be responsible for the collection of assessments, managing delinquent assessments, disbursing funds to the Association, and reviewing the Association’s progress and financial reports.
The primary role of the NMBBID Advisory Board will be to review and approve the annual budget and activity plan as proposed by the Association at an annual meeting of both bodies (Advisory Board and Association). Additionally, the Advisory Board Chairperson may transfer or adjust program funds within the budget, as long as the changes do not exceed 15% of the fiscal year budget. Any changes over that amount require full Advisory Board approval.
It should be noted that approval of this agreement does not constitute approval by the City for an individual project or program that requires City Council and/or Planning Commission approval, requires use of City property, or requires appropriate permits/approval from the City or any other governmental agency.
CONCLUSION:
Staff recommends that the City Council adopt Resolution No. 25-0055 approving an agreement with the North Manhattan Beach Business & Professional Association for the management of the North Manhattan Beach Business Improvement District and appropriate $82,050 from the Parking Fund.
PUBLIC OUTREACH:
NMBBID members were notified of the public hearing held on February 18, 2025, in which the 2025 Activity Plan and Budget were approved. The plan outlined that the BID would continue to pursue the establishment of a professional non-profit association similar to the DMBBPA and that approval of a future agreement would be recommended by the NMBBID.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 25-0055
2. Agreement - North Manhattan Beach Business & Professional Association